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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
Guide to create unlimited value in any organization, supported by rich, granular company stories
Drawing from real stories of how companies relentlessly improved quality, delivery, service, and cost structure, Creating Value: Empowering People for Sustainable Success that Benefits Employees, Customers, and Owners offers simple, powerful ways to think and act to unlock the nascent value of any enterprise. This book shares a dynamic business system that, when practiced authentically, taps into a more focused and productive organization to deliver superior value to customers in a way that improves consistently over time. Author John Rizzo draws from 30 years of leading successful business transformations in a wide range of industries. His approach, which creates sustainable success by empowering people to improve processes continuously, features the following principles:
- Apply a Holistic Business System: Develop a complete framework that integrates strategy deployment, value stream analysis, workshops, and management systems
- Prioritize People Development: Employ techniques that tap the wisdom of those who do the work—the true source of sustainable improvement
- Learning as the Foundation: Discover how hands-on improvement creates deeper understanding and represents the most fundamental type of continuous improvement
- Produce Quality at the Source: Build excellence into processes rather than inspecting for it afterward
- Leverage the Compounding Power of Improvement: Realize the power of small improvements accumulating into breakthrough performance
Creating Value reveals how pursuing excellence leads to outstanding results that endure over years. It is an essential resource for business leaders to dramatically boost employee participation and agency, while steadily increasing profits and boosting enterprise value leading to widely shared creation of value.
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Veröffentlichungsjahr: 2025
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Table of Contents
Cover
Table of Contents
Title Page
Copyright
Dedication
Acknowledgments
Preface
Chapter 1: Move the Machine Six Inches
THE BUILDING BLOCKS OF CREATING VALUE
THE LEGACY OF QUALITY
Chapter 2: Tapping the Power of a Holistic Business System
A HOLISTIC BUSINESS SYSTEM
MANAGEMENT APPROACH
HOW(S)
STRATEGY DEPLOYMENT
FROM WHERE WE ARE GOING, TO HOW WE ARE GOING TO GET THERE
WORKSHOP (ALSO CALLED KAIZEN)
Chapter 3: Sustaining the Dynamic Power of a Holistic Business System
RELENTLESSLY ELIMINATE WASTE
FUNDAMENTALS (FROM BUSINESS SYSTEM MODEL IN CHAPTER 2, FIGURE 2.2)
MANAGEMENT SYSTEMS
Chapter 4: Honor the People Who Do the Work to Improve the Work
Chapter 5: Fix the Problem at the Source to Ensure Quality, Delivery, and Service (and Not Just Cost-Cutting)
Chapter 6: Prioritize Learning as the Fundamental Source of Continuous Improvement
LEARNING BY DOING
THE BENEFITS OF FLOW
IT’S NOT ABOUT YOUR EGO
WITHOUT HUMILITY, IT’S DIFFICULT TO LEARN
Chapter 7: Leverage the Compounding Power of Improvement
Chapter 8: Perfect Your Processes Continuously
Chapter 9: The System Works
Everywhere
SIZE DOESN’T COUNT
LISTEN TO THE PEOPLE DOING THE WORK
Chapter 10: Align Around Value, Relentlessly
VOICE OF THE CUSTOMER METHODOLOGY
Chapter 11: Putting It All Together
PUTTING IT ALL TOGETHER AT A GLOBAL HOLDING COMPANY
OPERATING-LEVEL PERFORMANCE
MAKING IMPROVEMENTS PART OF DAILY WORK
THE CUSTOMER EXPERIENCE IS THE ULTIMATE KPI
Chapter 12: The Sustaining Way of Creating Value
About the Authors
Index
End User License Agreement
List of Illustrations
Chapter 2
Figure 2.1 Observe, listen, improve.
Figure 2.2 Creating Value Way.
Figure 2.3 Strategy deployment X-matrix.
Figure 2.4 Cascading objectives and goals.
Figure 2.5 Value stream analysis steps.
Figure 2.6 Value stream map example.
Figure 2.7 Improvement process.
Chapter 3
Figure 3.1 Visual management.
Figure 3.2 Leader standard work common format.
Figure 3.3 Management systems to sustain progress.
Chapter 5
Figure 5.1 Work balance in a flow cell
Chapter 6
Figure 6.1 Desk sign given to every new manager.
Chapter 11
Figure 11.1 The business system.
Figure 11.2 Workshop methodology.
Figure 11.3 Snapshot of one business unit’s journey.
Figure 11.4 Productivity (sales per total labor cost).
Figure 11.5 Inventory turns.
Figure 11.6 Safety.
Figure 11.7 Variable profit margins.
Figure 11.8 Ultimate validation of business system.
Guide
Cover
Table of Contents
Title Page
Copyright
Dedication
Acknowledgments
Preface
Begin Reading
About the Authors
Index
End User License Agreement
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EMPOWERING PEOPLE FOR SUSTAINABLE SUCCESS THAT BENEFITS EMPLOYEES, CUSTOMERS, AND OWNERS
CREATING VALUE
JOHN RIZZO
with TOM EHRENFELD
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To everyone who participated in workshops with me, endeavoring to improve
Acknowledgments
This book represents the culmination of a journey that began more than 30 years ago on a factory floor in Syracuse, New York. It would not have been possible without the wisdom, guidance, and support of countless individuals who have shaped my understanding of how to create enduring value.
First and foremost, I owe an immeasurable debt to my mentors, who introduced me to the principles and practices of continuous improvement. Chihiro Nakao, whose penetrating insights and unyielding standards taught me to see waste where others saw normal operations. Art Byrne, who taught me humility and demonstrated how leadership commitment transforms organizations and nearly threw me off a chairlift when I proudly described my “vendor-managed inventory” solution. Yoshiki Iwata, who showed me the power of simplicity and focus. Bill Moffitt, who told me to “listen to the operator and move the machine six inches,” forever changing my perspective on where wisdom resides in organizations. Bob Pentland, who refused to give me formulas and instead made me learn through struggle and discovery. Jim Cutler, whose patience and practical approach helped me translate lofty principles into everyday practice. John Fitzgibbons, chair of Basin and Talus Holding companies, who showed me what leadership is in a fast-changing, entrepreneurial environment.
I want to thank Julia Rizzo, who, after years of listening to heroic stories from the people who do the work, helped me put it all down on paper.
I am profoundly grateful to the thousands of workers, supervisors, managers, and executives who participated in workshops with me over the decades. Your willingness to question established practices, experiment with new approaches, and share both successes and failures has been the true foundation of everything I’ve learned. Special thanks to the machine operator at Crouse-Hinds who had the courage to speak up about moving that machine, setting me on this path.
To my colleagues at Moffitt Consultants, especially Rick Jeffrey, Brett Jaffe, and Mark Hamel, who shared this journey with me. Thank you for your partnership, challenge, and support. The collaborative learning we experienced together expanded my horizons far beyond what I could have discovered alone.
I am grateful to the board members and investors who believed in this approach even when it seemed counter to conventional wisdom. Your willingness to focus on long-term value creation rather than short-term extraction made transformations possible.
Thank you to all those who contributed to the creation of this book: acclaimed editor Tom Ehrenfeld, who helped sharpen my thinking and clarify my expression; those who provided feedback on early drafts; and the team who managed production and distribution.
To my family, who endured my frequent absences during workshops and transformations, and who patiently listened as I excitedly described the latest breakthrough in setup reduction or material replenishment systems, your love and support made everything possible.
Finally, my deepest appreciation goes to the frontline workers in organizations around the world. You are the true heroes of this story. Your insights, creativity, and commitment to improvement demonstrate daily that the most valuable asset in any organization is its people. This book is ultimately a testament to what becomes possible when we honor your wisdom and create environments where everyone can contribute to creating value.
Preface
In the relentless pursuit of quarterly profits and short-term gains, many organizations have lost sight of what truly creates enduring value. Today’s business landscape is increasingly dominated by approaches that extract value rather than create it, where financial engineering trumps operational excellence, where employees are seen as costs to be minimized rather than assets to be developed, and where customers are viewed as transactions rather than relationships.
This book offers a different path forward.
For more than 30 years, I’ve had the privilege of witnessing and participating in transformations that have created billions of dollars in value across diverse industries—not through financial manipulation or exploitative practices, but through a comprehensive approach that respects and develops people while relentlessly improving processes. The results speak for themselves: dramatic improvements in quality, delivery times slashed from months to days, safety incidents reduced by 80 percent or more, and profits that consistently outperform industry averages.
What you’ll find in these pages isn’t just theory, but proven practice distilled from over 1,000 workshops and dozens of organizational transformations. From manufacturing men’s suits to processing insurance claims, from producing rocket fuel to managing luxury apartment complexes, the principles and approaches shared have demonstrated their universal applicability.
The holistic business system described isn’t simply another set of tools or techniques to be mechanically implemented. It represents a fundamentally different way of thinking about work, people, and value creation. At its core lies a simple yet profound approach: being present where work happens, observing with open eyes, and truly listening to those who do the work.
This journey begins with that pivotal moment at Crouse-Hinds when a machine operator suggested moving equipment just six inches to improve his work. That small act of listening and responding set in motion what would become a career-long commitment to this way of creating value. The lessons learned from that moment and countless others since then have shaped my understanding of what makes organizations truly excellent.
Whether you lead a global enterprise or a small team, whether you work in manufacturing, healthcare, technology, or services, the principles in this book apply. The system works everywhere because it addresses fundamental human and organizational dynamics that transcend industry boundaries.
My hope is that this book will inspire you to reconsider conventional management practices and embrace a more sustainable, humane, and ultimately profitable approach to business. The path I describe isn’t always easy, but the rewards—for employees, customers, shareholders, and society—are immense.
The choice is yours. Will you be lured by the path of value extraction, or will you commit to creating value that benefits all stakeholders? The journey toward operational excellence begins with the decision to be present, to observe, and to listen. Everything else follows from there.
Chapter 1Move the Machine Six Inches
“Listen to the machine operator and move the machine six inches,” my mentor, Bill Moffitt, who was coaching me in a team improvement workshop, advised me.
My colleagues and I were gathered on the factory floor of the Crouse-Hinds Company on a Monday morning in Syracuse, New York. Crouse-Hinds (then a part of Cooper Industries, now a subsidiary of Eaton Corporation) is a leading manufacturer of electrical equipment, specializing in products designed to withstand hazardous and harsh conditions.
The stakes are high when manufacturing this type of equipment. When a worker is doing electrical installation on an offshore drilling rig in the Gulf of Mexico, for example, an explosion-proof electrical enclosure can mean the difference between a straightforward day on the job and a catastrophic explosion.
On this cold and snowy Syracuse day in 1993, we were gathered to conduct a team improvement workshop. Based on lessons learned by our mentor from Toyota, this workshop was the first of its kind at Cooper Industries. The team consisted of production workers, union officials, supervisors, and management. It is fair to say that everyone in attendance was apprehensive. The members of the team represented a diverse array of disparate—or even competing—interests and agendas.
The goal of that 1993 event was to create flow. Flow is a term that describes any work in process that moves forward without pausing and each piece is completed individually rather than in a batch. Prior to this event, the manufacturing equipment on the factory floor was divided into distinct functional departments. The divisions between the functional departments had prevented work from flowing between stations without conveyance or other delays.
During this workshop, the team brought all the workers together to create a unit called a cell. This reconfigured way of working reduced lead times by shortening the distance the parts had to travel, as well as reducing the amount of time the parts spent “sitting around.”
The potential benefits of the new cell were significant. By eliminating the siloed functional departments and creating cells, we enabled faster delivery, immediate identification of quality issues, lower cost from less handling, and less inventory.
Making these changes produced human and organizational benefits that extended far beyond the immediate logistic—and even financial—advantages created by moving equipment. Culturally, we were making it clear in the moment that we were serious about change—and that every person involved was empowered to be change agents. Workshops have a bias for action, meaning there is little to no delay between decision-making, planning, and implementation. When we made the decision to create the cells, we got them up and running in the same week.
Implementing the new structure was simple but not easy. Moving multi-ton manufacturing equipment to create cells is an intensive process. Due to the size and weight of the equipment, we needed to bring in an outside contractor—a “rigger”—to make the move. Demonstrating our bias for action, we hired the rigger and moved the equipment on the third day of the weeklong workshop. Improvements that can be made in real time often yield the best outcomes.
By the end of the third day, the rigger had repositioned the machines. When we came in the morning after we moved the equipment and asked the machine operators for their feedback on the new layout, one worker said, “If this machine was turned six inches, I wouldn’t have to walk an extra step. I could just turn and reach.”
My initial thought was about the expenditure needed to rehire the rigger to move the machine a scant six inches, adding time and cost to the process. And yet my coach, Bill Moffitt, said something that permanently opened my eyes. He looked at me and said, “Listen to the operator. Move the equipment six inches.” I trusted Bill to do so, and so we reluctantly brought the riggers back and repositioned the equipment.
And this operator eventually said, “My gosh, they actually listened to me and did what was best!” His conviction made my job easier moving forward. While the union was initially suspicious of what we were doing, that simple act got the ball rolling in terms of building trust and mutual respect. Change driven by the people who do the work proved to be more successful than the traditional “top-down” manufacturing management approach. We got to the point where the union started suggesting areas of improvement and volunteering to participate in workshops.
In that instant, Bill Moffitt helped me understand the enduring value of listening to the people who are doing the work and acting on it swiftly. I truly do not know where my career would be today if we hadn’t moved that piece of equipment six inches and made that operator’s job a little better, while simultaneously making delivery to the customer a little faster.
By immediately acting—agreeing simply to move the equipment in that moment—we sent a key message not just in the moment, but for the long term, responding to and validating what this operator shared based on his years of experience.
That was the start of my continuous improvement journey. That event laid the seeds for the convictions that have guided me for decades. At that moment, on the factory floor, we saw what was going on, listened to the operator, and made improvements.
This simple interaction marked the start of the continuous improvement journey at Crouse-Hinds. We earned buy-in from the operators almost immediately. Notably, the operator who suggested moving the equipment six inches was a union steward. He saw that the continuous improvement team observed the work being done, sought his input, and took his feedback seriously. He then told his colleagues in the union to give it a try. There was little written at the time about this improvement process, and he put his trust in us based on our actions.
Over the coming months and years, we would radically transform how this producer of electrical construction materials organized the way they made their products, in a way that would serve their customers far more powerfully and productively than they had before. We eliminated their archaic method of breaking work down into functional departments (like machining, wash, assembly, warehousing, and more), and created eight business units that were organized by value stream instead. Now each business unit incorporates everything needed to get a product to a customer—including administrative functions such as engineering, purchasing, and accounting—that were previously siloed. Doing so allowed us to produce items in a state of flow where work traveled seamlessly from raw materials to a finished product.
This huge change delivered benefits far beyond the cost savings from having pieces in process sitting around waiting to be passed to the next step. We reduced the many costs associated with waiting, overproduction of parts, overprocessing of materials, excessive inventory, and more. We would now have positive pressure on fixing problems as they occurred. In addition, implementing flow produced enormous gains in on-time delivery and quality, because, as quality issues emerged, workers would discover and immediately resolve the source of the defect then and there.
From such small gains we cumulatively garnered significant achievements. Over time, we reduced inventory levels by 50 percent, reduced operating costs by 15 percent, reduced defects by 80 percent, and set new records for customer service with an on-time delivery mark of 100 percent. Filtering out all the excessive inventory, work, and capital from how we made things, coupled with greater customer satisfaction, improved cash flow for the business by more than $30 million.
That moment represented more than the start of the journey of continuous improvement for Crouse-Hinds. That workshop and all the beliefs embedded in it (whether known or simply suggested at the time) generated foundational ideas that have informed my entire career. That was the first time I deeply understood the importance of being present, seeing the work being done, and listening to the people doing the work.
Sure, we reaped the expected operational benefits, and the cell ended up reducing lead times by several weeks by producing parts in one-piece flow versus moving large batches between different departments. Our customers were delighted by our ability to serve them faster and more flexibly. But more than that, I discovered enduring and repeatable cultural lessons that have guided me and my colleagues over a range of successful turnarounds and breakthrough transformations.
Over the last 30 years I have led or participated in more than 1,000 workshops through my work as an executive, an investor, or a consultant with Moffitt, helping implement a better way. I’ve seen this approach improve the work in hospitals and mattress retailers, in temporary medical staffing firms and laboratory animal science companies. I’ve seen it boost the quality, on-time delivery, service, and cost structure of companies that make everything from men’s suits to steel doors to rocket fuel to drywall. I’ve seen this apply in every type of company and firm; I know that it works as effectively at a global manufacturing company as it does in a small museum, zoo, governmental agency, or nonprofit. I don’t know where my career would be today if it wasn’t for moving that piece of equipment six inches.
My colleagues and I call this approach a “holistic business system,” and I’m a firm believer that following this way of creating value represents a better way for companies to succeed today.
In recent years, companies have increasingly turned to short-term opportunistic strategies based on leveraging capital, bullying customers, and exploiting technical advantage for growth. This prevalent approach seeks ways to extract value quickly from companies and organizations by selling assets and holding customers captive. This approach represents a way of business that disrespects employees and customers, delivers a limited product or service to customers, and proves itself unsustainable over time.
We see this in the triumph of some private equity firms that profit from framing companies as static agglomerations of assets to be purchased and then sold piecemeal, with no vision of the greater whole. Debt is a neutral tool employed to maximize transactional values, and little care is paid to the long-term viability and health of the enterprise. All the profit is generated by the deal, and none of it is contingent on boosting the long-term health—and profit—of the venture. This impatient, transactional, short-term process does little to nothing to increase the health and vitality of healthy businesses and operates largely as a massive transfer of wealth into a small, concentrated set of financiers.
Employees in this way of doing business are seen as expenses to be cut, impersonal costs that are fungible and expendable. Loyalty and expertise are rarely valued. The value of learning and growth is profoundly discounted.
Through my work helping more than 50 companies and organizations transform I’ve learned that a better way is possible. Many companies (and nonprofit organizations) today are poised to achieve their strategic objectives and experience healthy growth by providing exceptional products or services, and doing so in an enduring and inclusive way that creates value for employees, customers, stakeholders, and society at large.
This approach applies equally to retail and service businesses as it does to small manufacturers making basement doors and, of course, to large multinational corporations. I’ve learned this through my work with many such organizations over the past three decades, helping them improve the quality of their earnings while preserving and generating stable work for loyal employees year after year. Such quiet, consistent performers churn out profits and generate good jobs for loyal employees year after year.
Internally, my peers and I have codified these principles as a “holistic business system,” a comprehensive business system of continuous improvement that serves people, employees, and organizations. This approach has created billions in value for all involved by dramatically eliminating the waste that can be found in existing organizations. This system unlocks value by empowering the people who do the work to improve the work, and it taps into a more focused and productive organization to deliver superior value to customers in a way that improves consistently over time.
THE BUILDING BLOCKS OF CREATING VALUE
A handful of core values animates this framework: fundamentals such as being present, seeing the work being done (at the workplace itself), showing respect by listening to the people doing the work, acknowledging their contributions, and valuing their opinions. These building blocks support and reinforce each other in a dynamic system where value compounds over time.
This approach runs contrary to many accepted truths about how to compete in today’s economy, including a firm commitment to respecting the input of those who do the work, focusing relentlessly on creating and delivering more value to customers over time, and achieving success through consistent internal improvement, rather than gaming the system or gambling recklessly with capital. This business system is the result of my lifelong journey with business transformations and continuous improvement.
This hands-on business system has a bias for action in the service of eliminating waste—to serve and deliver eternally growing value to customers. And while improving the processes by which organizations deliver value to customers naturally reduces cost, the primary benefits are that it creates the best possible quality, delivery, and service to create value for employees, customers, stakeholders, and society. And it has paid off for us consistently in myriad companies in a wide range of industries over time, resulting in billions of dollars in value creation. Applying these insights will enable you to unleash dramatic value by empowering your people in any company, anywhere.
I do not profess to be an expert in Lean, Six Sigma, Toyota Production System, Danaher, or Wiremold. However, I have learned greatly from each of them. I have been fortunate to have great teachers and mentors, including Chihiro Nakao, Art Bryne, Yoshiki Iwata, Bill Moffitt, Bob Pentland, and Jim Cutler. However, the best teacher of all has been the workplace itself and the people who do the work. All the stories, experiences, and lessons in this book contribute to this model.
This business system is not the Toyota Production System or Lean. It is a collection of what I have learned over many years from many teachers, businesses, and organizations. It’s about developing people. It’s about observing, listening, and making improvements. It’s about eliminating waste to optimize quality, delivery, service, and cost structure. The system is hands-on with a bias for action. It is not a cost-reduction project, although process improvement process may result in cost reduction. It is about having the best possible quality, delivery, and service to create value for employees, customers, stakeholders, and society. It is applicable to any industry or organization. I have been involved with many transformations, and without the whole system, I have never seen breakthrough transformation and real value creation.
THE LEGACY OF QUALITY
In all these organizations, we have seen irrefutable proof that quality is the engine of growth. And that internal, built-in excellence eventually manifests as superior performance in the marketplace. Enduring success is not about gaming the system; it’s about becoming world-class to play the game successfully. Superior processes inevitably produce superior results in every company and organization.
